Keep to the law or face having budgets overturned and errant officials landed with litigation costs, the Supreme Court of Appeal (SCA) has told the City of Joburg.

The SCA ruled yesterday that Joburg illegally charged business property owners a 28 percent rates increase two years ago, overcharged them about R250 million, but as "the egg could not be unscrambled", no ruling was made on refunds.

Instead, the council was ordered to comply with the local government laws "when it materially amends a proposed budget after it has been tabled and advertised for public comment".

To make it clear, the SCA wrote a guideline on the correct steps to take in such a situation.

"The city acknowledges the judgment and the clarity given in relation to the city's rate tariff-setting process," said council spokesman Gabu Tugwana, adding that the city would "enhance its community and stakeholder engagement processes".

The appeal was brought by the SA Property Owners' Association, which represents 90 percent of all business property owners, which lost the first round in the Johannesburg High Court when that court ruled that repaying the businesses could bankrupt the city.

The SCA said public participation was a fundamental aspect of the local government system, including in the budget, but the city had failed to do this properly.

The SCA judges said that ultimately, repayment wasn't asked for or discussed, so they would not make an order on this.

But they warned the city to behave. "Does this mean that the council can continue flagrantly flouting the law with impunity? The short answer, based on the principle of legality, is no."